New Balkans Law Office (www.newbalkanslawoffice.com) is often approached by clients who aredissatisfied with the judgments issued by the Bulgarian courts and feel thatthey have been unfairly treated. While, as a general rule, the Bulgarian courthas the last word in the case, it is also important to recall that Bulgaria isa party to the European Convention on Human Rights (ECHR), which provides additional legal protections against propertyviolations.
Most claims under the ECHR are broughtby individuals, and usually relate to topics such as discrimination, unfairtrials, or intruding upon one’s right to private and family life, among others.Only when all national appeal courts have given judgement on the case can aperson appeal to the European Court for Human Rights in Strasbourg.
However, investors, includingcorporations, can also benefit from the ECHR. Their investments constitute‘property’, which is expressly protected by the Convention.Bulgarian courts areunder the obligation to abide by the Convention’s requirements. Therefore, theymust uphold the claimant’s right to property and, accordingly, ensure thepeaceful enjoyment of their possessions.
We are currently representing one suchinvestor before the Court in Strasbourg. He invested in real estate in Bulgariashortly before the 2008–2009 financial crisis. Subsequent financialdifficulties caused the local developer to take questionable measures withoutthe investor’s knowledge, which resulted in the property being mortgaged andultimately handed over to the lending bank. After several years of complaints,the Bulgarian prosecutor’s office dismissed our client’s claim that anycriminal activity had taken place, in effect denying him protection of hisinvestment. If our complaint under the ECHR is successful and the Court inStrasbourg finds that there has been a violation, the prosecution will have tore-initiate proceedings against the developer.
The scope and significance of investorprotection provided by the European Court of Human Rights cannot be overstated- especially for those considering investing in Bulgaria. Property rights, suchas those upheld by the Court, are essential for creating a stable andpredictable legal environment that encourages investors to invest and growtheir businesses. Investors, be they natural persons or corporations, oftenplace large sums of money into foreign countries and rely on the host country’slegal system to protect their holdings. The Court’s focus on investorprotection helps ensure that investors are not subjected to arbitrary ordiscriminatory treatment by host countries, and have incentives to makeinvestments that benefit the economy.
You can read more publications from the New Balkans Law Office at the links below.